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tv   Bloomberg Markets Americas  Bloomberg  January 18, 2017 12:00pm-3:31pm EST

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we are covering stories from washington to davos this hour. here's what we're watching. market stocks are mixed. treasuries are falling, the dollar gaining a reversal of yesterday's trade. goldman sachs and citigroup estimates thanks to a bond trading revival. shares of both are lower today. the world economic forum in davos, including interviews with ken schwarzman and jamie dimon, that's coming up in the next two hours. first, a look at the markets. julie? julie: stocks little changed today. we are not seeing anything big to move the needle in terms of equity trading going one way or another. very littlenasdaq changed. there are some interesting movements within subgroups of the major averages.
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steelmakers, it's not just the president-elect to can move stocks around. the incoming potential commerce secretary being grilled on capitol hill and he talked about steel tariffs during his commentaries. he said what's needed is more of a tariff focus on steel and aluminum anti-dumping. he talked about some of the anti-competitive measures from china. we saw the steelmakers rise on these comments, alcoa, nucor, and steel dynamics are all getting a bid. also getting a bid, onebeacon insurance, specialty insurer controlled by white mountains insurance group. bloomberg news are porting the company exploring a sale, according to people familiar with the matter. those shares spiking, there have been other deals within this specialty insurance industry, share spiking by 8%. white mountain, which control havef onebeacon shares,
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also been rising in today's session although not by as much. labored last reported in 2015 -- bloomberg last reported in 2015 that a sale of onebeacon was being considered trade representatives for each company declined to comment. we're watching retailers in today's session. they are going in the other direction. the retailers are going down. target cut its earnings forecast. sales were hurt by disappointing customer traffic. the company saw an increase in digital sales but did not see that traffic at its store. now it's looking at most, $1.55 and profit. -- in profit. were cuts and kohl's to underperform from neutral. they see those companies in particular are lagging even their department store peers. jcpenney shares are lower. finally, a quick check on oil
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prices. somewhat volatile today. initially falling more sharply, at one point during the session after the iea talked about how shale production in the u.s. will continue to create some oversupply. then we heard from mohammed barkindo at davos, the opec anne marieking with horton and saying we are not seeing equilibrium in the oil markets and might not bring it into production cuts by the middle of the year. oil came off the lows. hyman, thanks for that large update. a lot going on today. let's get to first word news with emma chandra in our newsroom. emma: president obama will hold his final news conference as president today. he's expected to defend his decision to shorten the sentence of convicted leader chelsea manning. the white house says he will also talk about his decision to
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the country after he's no longer president and his commitment to working with the incoming trump administration. bloomberg will have live coverage. a senate hearing is underway for congressman tom price, president-elect donald trump's pick for health secretary. the house committee chairman said he wants to hear price's views on how republicans would replace the affordable care act. the russian military says it teamed up with turkey to conduct joint air strikes against and a form of state group stronghold in northern syria. of ldap, in the province of aleppo. the two nations have backed opposing sides in the nearly six-year syrian conflict. ankara -- thatr president george h w
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bush has been hospitalized in houston. a spokesman says he was taken to the hospital on saturday for shortness of breath. mrs. -- mr. brush is said to be responding well to treatment and will be going home soon. the former president is 92. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. david? david: the world economic forum is hosting its annual meeting in davos, switzerland this week. schwartzman is also the chairman of donald trump's strategic and policy forum, and erik asked him what he is learning from spending time with the president elect. >> i've come away with the fact time,t's a really busy that he wants to do -- at the end of the day, the right thing for america. wants to improve the economy. flexiblehe's a pretty time,
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person, when he's presented with information. he'll go to the right place. sometimes a little colorful getting there. an interesting quick study. k: some of the things he has said have concerned people, the things he set about trade, for example. have you been reassured in your conversations with him privately that maybe some of the things he has said -- either he's more flexible on thenk: some of the s people might think, or he has a different point of view than what he articulated publicly? >> i think some of it is a different style of communicating. mes areic tehmes -- the really quite set, whether it's bottlenecking the economy or minimizing some regulations, --ther it's time to reform
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tax reform, whether it's bringing dollars back to the united states to be productive. their whole variety of basic things. that aree are other sort of descriptions of things you might do to accomplish that objective, which gain a lot of that are sort of descriptions of things may not betention bit -- but where things ultimately settle out. erik: beyond accelerating growth, what could he do, what is his administration do that would help your businesses at blackstone? i'm thinking on tax policy, financial regulation. worry so muchlly about what's good for blackstone. i worry about what's good for the country. when the country does really well, imagine that if we can take growth from, i
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guess it is average to somewhere around 1.8 some -- 1.8, and move that into the threes, leads to greatly increased values for our company. it leads us to hire more people. it leads our companies to get better, a real estate to be worth more. so our linkage really is what's good for the country. erik: but your shareholders worry about blackstone. >> i hope they don't worry. they are supposed to be happy. our job is to make them happy. buttoned up. erik: are there things he has talked about doing that would be good for business? >> there's a very complex tax everyone isich still trying to figure out as to
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whether it's good for your overall company or good in our case for some of the businesses or some of the real estate that we have. and i think it's early days because the program hasn't really come out yet. erik: the subtext here in davos is a world turning inward and away from globalization. can you feel the anxiety? i can feel general anxiety because there's change in the air. whenever you get a new administration in the united states, people realize that policy ultimately has major consequences, and we've got a new administration. erik: know when and corporate america has made such a big commitment as you have to china. blackstone invests in and for china. you've created and personally and doubt the most ambitious scholarship program since the .oads and schwartzman scholars
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many people have told me they are very concerned about what donald trump might do vis-a-vis china. what do you make of that? >> part of it is that the u.s. generally has a pretty unbalanced relationship with many countries, in terms of taxes that get paid to enter another country. we let people come into the united states basically for free. that whole aspect, not particularly vis-a-vis china, is being looked at by the new government. erik: but he has singled out china. do you worry that if he were to pursue an aggressive policy on that with the chinese, american companies would lose some of what they had in china, the market asked us -- access the companies like yours have had? >> i had lunch yesterday and talked to the president of china. it was a good conversation.
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erik: what did he say? he was very positive on the long-term relationship between readyuntries, that he was to engage when the time was right, and the u.s. had figured out what its positions were, and that they've gone through many u.s. administrations with many chinese administrations, and he was anticipating being able to work things out, as are the u.s., despite the kind of timeage that from time to is employed. it's early days there. multiplying things that get set to create enormous anxiety is a little overdone. cofoundert was the and chairman of blackstone. coming up, health-care
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stocks look ahead after president-elect donald trump's first news conference since july thereeek, after saying needs to be a new bidding process for the drug industry. we will get the outlook for the .ealth care sector also, the hearing for representative tom price before the senate finance committee is underway. he's taking some fire from al franken and patty murray. some of the things price has been saying, the individual insurance market is in a downward spiral. he has not commented on drug prices. insurance for everyone has always been his goal and continues to be his goal. hhs nominee tom price. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." it's time for the bloomberg business flash, some of the biggest news stories. jpmorgan is agreed to pay 55 million dollars to absolve allegations of racial discrimination in home loans to mortgage brokers. jpmorgan initially denied those allegations been announced a settlement without disclosing the amount. the nonprofit behind the bestseller clinton cash upped 2/3 of its funding from a single
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hedge fund manager could robert mercer provided $1.7 million in 2015. governmentthe accountability institute, was cofounded by steve bannon. he is now president-elect donald trump's chief strategist great american airlines taking a page from united-continentals playbook. the new basic economy tickets limit carry-on bags to 1, under the seat in front of you. tickets will go on sale in select u.s. markets next month. and that is the bloomberg business flash. vonnie? vonnie: one industry holding its breath for the president-elect, donald trump's inauguration on friday is the pharmaceutical industry. tom lit into pharma companies, declaring they were quote, getting away with murder. facesentative tom price senate questions on the repeal of obamacare. that is front and center.
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here to talk about the impact of policies on the pharma sector --we start and more with your performance. certain years you doubled or tripled returns. now, are you just a little bit trepidation is about what's happening next with pharma and biotech shares? focused.e a value we try to identify companies that offer a good foundation of value. now, i still see a lot of opportunities. we have navigated the noise and euphoria and pessimism and we just take with where we see value. i continue to be optimistic about the prospects for health care companies. david: how overwhelming is the emotions right now?
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how do you go about navigating that? >> we are focusing on the value of the companies, on the balance their cash flow. that is what we will use as a guiding light. no matter what happens with health care legislation and the affordable care act, we believe the companies we have chosen will do well no matter the outcome. vonnie: we just heard tom price saying he wouldn't comment on what the bidding their so-called bidding process the company would have to go through. would you say you look at underlying fundamentals and so forth, if there is a bidding process and pharma companies had to bring down there prices, do you see that happening, and do fundamentals look very different in that scenario? >> fundamentals would look much worse under a bidding scenario. there already are market forces drugrk that -- work to cap
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prices. 90% of prescriptions in the united states are filled with generic drugs. drugve a robust generic business to save the consumer a lot of money. drugnk the branded companies will make an argument that if there is some kind of price control or some sort of bidding process, that that would impede research and development. i think people would listen to that argument. david: the affordable care act several years old. the prospect of it changing or going away completely. but with that process be like? how seismic could those changes be as a whole for the industry? it's interesting. i don't think the pharmaceutical and biotechnology industries have significant windfall from the affordable care act, and i don't think they would suffer significantly if it were to be repeaeled. however, i really question whether the government can throw 18 million americans off the
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insurance roles without some kind of replacement rate i don't think we will have an apocalypse in health care coverage. vonnie: what do you see the argument that was made by the likes of mark iliad, pfizer? that's only one argument. they will need more in order to keep their prices as high as they are. it used to be a death sentence and it's not anymore, because the drug companies pursued medicines. now.e that the immunotherapy product for cancer, where it has benefited a tremendous number of patients. hepatitis c used to be a very onerous disease to treat were patients would have to take injections and a pill, and now thanks largely to gilead and a
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couple other players, you can take a pill for 84 days and it 90% of the cases, it is cured trade the drug companies have created a tremendous benefit to society. it's really the players who have jacked up rice is a great just lay for products that don't provide value -- prices for products that don't provide value. vonnie: what are you hoping to have happen? what are you doing? course,e staying the and we've had great skepticism on some of the companies that have increased prices dramatically. matter what happens, i don't think the insurers are going to reimburse $1000 a month for valeant, the antidepressant, when there are generics available for $30 a month. vonnie: you are short valeant? >> yes.
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we have other companies like therapeutics. therapeutics. it has not jacked prices significantly. it has a good balance sheet, great cash flow. we are sticking with therapeuti. it has not jacked prices significantly. it has a good balance sheet, great cash flow. we are sticking with that, using the value as the guiding light, and we are continuing to hold united therapeutics.
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vonnie: this is "bloomberg markets." david: should they say or should they go, that is the question in the united kingdom. the world economic forum's annual meeting and davos, switzerland. what banks are planning to do. >> i think irrespective of exit, which is a decision the british people have made, that london will remain a global financial center, and i believe that the revenue impact of brexit on financial services will be made good into three years' time. specifically what will happen is, those activities covered specifically by european legislation will need to move. looking at our numbers, that is 20% of revenue. >> with brexit, we will have to. the question is how many. it will depend on the agreement
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the u.k. will reach with the eu. we will have to move bankers, and i think we have -- in frankfurt we have an appropriate set up in spain, we have flexibility, but we will definitely have to move. david: the president of ubs speaking to us from the world economic forum in davos. the confirmation hearing for wilbur ross, the billionaire named to head the commerce department, continues in front committee.te we'll be following that all afternoon. this is bloomberg. ♪
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we see bit of a divergence. there were hoping the sales growth will catch up to the stock price. instead, it looks like the sales growth was telling the story for the stock having the worst day from august. we have more decliners to the downside. 's andlooking at kohl jcpenney. christian bus was told by the idea that these have have less valuable mall. he think they may suffer. we have masons trading lower. lowest levels since 2011. more declines are ahead. 35.44. a longer-term chart. we see a beautiful uptrend and the uptrend has started to reverse after the end of 2015 in what is known as a bearish cross, 50 day moving average
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below 50. lots of sales pressure and silica momentum. and the lead a 50% decline. we may be looking at a double death cross which may be the area of congestion which is to the downside. there could be downsized. the companies including pbh and michael kors, some weakness there. in the apparel wearers who sell and department stores. vonnie: thank you. david: two days away from inauguration day. the global economy and business is a major theme. they will meeting in davos, switzerland. our colleague erik schatzker talk to ken moelis.
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>> it is a complete almost 180 degree shift in just the way people think about business. that's the difficulty people have. we went from a very -- i said less than this is his ministration which who has built his whole life around business. country,n you say this you're mentally transporting yourself back to the u.s.? officer, the world is participating in that change. erik: when you say we have to rethink, what do we need to think? ken moelis: if the policies he is talking about is implemented, lower taxes, less regulation, these are very pro-business. i do think the country is going to be -- corporations will have to respond to that. there are not perfectly set up to deal with a different tax rate, low regulatory environment.
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keep after reaching policy. they have been under the impression that the obama administration would continue on in some manner under a clinton administration. erik: it seems like you are having these type of conversations with your clients. ken moelis: people are trying to figure out where it will be. it will be difficult. inauguration is tomorrow, i think. erik: friday. ken moelis" we have not even started. there will be a lot of decisions have to be made as to how you set your business up. i believe as recently as 90 days ago, you did not have the same information as set of rules to consider. erik: one thing back up because and destabilizing for many companies is the elimination of the deductibility of expenses. what are your thoughts? are you talking to people and how are you preparing for what they may have to go through? ken moelis: not yet for your have to put in the context of a
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lower tax rate and repatriation of overseas. profits. i do not think you can pick any one of these off yet. is thee to see where administration goes. i think it'll be very quick. people have asked of me -- i have been all of the world and i believe the administration and congress will work on taxes. i think that will be something that is a priority. i hope so. i think we will have more information. do your overseas clients think about what is happening in america right now? a littles: they are confused free i happened to be in germany and woke up to a tweet about angela merkel and bmw and changed the conversation all day about what we do versus what does that tweet to mean. erik: are they fearful? certain places are. i was in mexico last week and the mexican business community is fearful.
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i think they are fearful more than just business and economics , i think they are worried if we are too hard on the mexican economy they can have an election swing to a place they do not want to go. everybody is in anticipation. the place i felt a real fear was in mexico. erik: given there's going to be change in affecting companies in american outside, what does it mean for business? ken moelis: for our business, we give advice to companies on how to position themselves. when the rules change soldier medically, everybody has to rethink their strategy, position, though to market, competitive. athink we will generate conversation. -- when the rules change soldier medically, everybody has to rethink their strategy, position, market and competitiveness. 180 degrees in the opposite direction.
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vonnie: the unpredictability factor, ken moelis was asked how does it of productivity in income inequality. ken moelis: i do think there will be, somebody said yesterday capital is shy. you might have a slight holdback as people try to figure out where it all goes. there's one thing i believe, the reason donald tusk talked about inequality is the u.s. has been zero .5% of gdp. we are growing at 2%. are 3% plus grower. -- the reason donald trump talked about. one point. is 200nt of u.s. gdp billion dollars. that is a lot of inequality. into 3%n get ourselves plus growth rate and i hope we do tell 4%, that is a lot of of money and a lot of gdp and corporate activity.
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for a business, america and a world free erik: it may take time before we see that happen. -- america and the world. -- at what point does it pick up ? --ken moelis: i think you will get a real read. if congress and mr. trump don't get together, they will miss a big opportunity. i think we will get a read much quicker than a lot of things. tax rates will come down, corporate tax rate and a help individuals will too. i think you will see a surge of opportunity in investment. --c them and -- -- buried and could yourik: give a read on m&a? ken moelis: it was big before
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the election. before things got sidelined. there was a steady stream of good quality m&a. i think it will continue. anytime the changeup the rules, the tax rates, the regulatory environment, everybody has to rethink. the goal to market position. they usually leads to repositioning. i think it will be active in the m&a market. vonnie: that was ken moelis. david: goldman sachs. a bunch trading revival. the news is not as good further equities. shares of the banks are down. the latest -- coming up. this is bloomberg. ♪
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vonnie: it you're watching bloomberg. i am vonnie quinn. mark: i am mark barton. vonnie: stuart gulliver tells bloomberg why it he may have to move the trading operations out of london. cutting the forecast for the world's largest educational company and blames plunging textbook sales. policy coulddollar be coming to an end as president the donald trump says the currency is too strong. vonnie: stuart gulliver has praised theresa may for the handling abrasive. he said trading operations that generate about 20% of the investment bank may move to paris. -- for the handling of brexit.
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>> the best of both worlds and the opportunities in the asia-pacific and the benefit of london, i think irrespective of brexit, we need to get on an executor that london will return or remain a global financial center. ofelieve the revenue impact brexit on financial services will be made good in two or three years' time. the foreign exchange market market, equityd market growing, high yield, specifically what will happen is those activities covered by european legislation will need to move. looking at art end numbers, 20% of revenue. the largest educational company is cutting its forecast because of plunging textbook sales in the u.s. it is lowering is dividend. random house sales for u.s. higher education fell 30% in the fourth quarter.
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foret has cut its forecast the fourth quarter and for the entire year. the discount retailer said holiday sales fell 1.3% off what it called disappointing customer traffic. a bigger drop at target stores partially upset by 30% increase in digital sales. electronics and entertainment were those slow sewers. down and those single high digits. -- slow sellers. be other big world banks estimates. goldman sachs says profits more than tripled. the fixed income business goblins for speculation that economic growth will pick up and citigroup revenue rose 31% in the last three months of the year beating the bank's own forecasting. vonnie: time for bloomberg quick take were we provide context of issues. the u.s. dollar is mightier than
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others and other countries are driving their currencies down making their goods more competitive. the u.s. downs out as the one nation that traditionally is referred to as its currency strong. it is a mixed blessing. in an interview, president-elect trump called the dollar "too strong," signaling he made break from those -- simmons link he may break from the strong dollar. names.mattel, gap, big the rest of the world, a good for uro means companies that sell to the u.s. onota makes more money dollars on cars sold with the dollars. here is the background. the u.s. economy became the world's largest in the 1870's.
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the british pound remains the dominant currency. that change with all federal reserve in 1913. intimate the dollar the theminent official in 1945 u.s. money was the standard used to fix a change rates. in 1985, the plaza push down the dollar value for while to slow japanese exports but that did not last. the argument. the rise agree that has made it tougher for the fed so raise the interest rate. the surging dollar is higher. the president-elect has set of strong dollar sounds better than it is in reality. the u.s. currency may be ready for a rethink under the new administration. you can read more about the dollar and are quick takes on bloomberg. head to bloomberg.com for more stories. ♪
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vonnie: this is "bloomberg markets." andd: goldman sachs citigroup are the latest banks to beat revenue. let's bring in alison williams. sachs we got to goldman and citigroup, news crossing. the department of justice has reached a settlement with credit suisse. theyta lynch saying that will hold accountable the institutions for the financial crisis. you cover credit suisse print how big of a deal is it? alison williams: another fine. what is interesting is the europeans is announcing the fine a by deutsche bank and reserving
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four they'll find part. a fine and consumer relief. consumer relief is payable over longer period of time. for the u.s. companies, it is tax-deductible. the positive for both parties coming down saying the settlements are final. we hear that you were right before the holiday season and now, deutsche bank yesterday saying they have finalized credit suisse. really helping to put a major risk behind the. david: now to the next administration. vonnie: are they done with legacy issues? alison williams: they are not done with legacy issues. issued say the doj lingers for a number of things. in creditche bank suisse joining some of the biggest u.s. and that has been a major stepping stone in improving returns and being able to return capital to shareholders. other banks out of their with
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his doj and credit suisse and deutsche bank and risk continuing. for deutsche bank, they added there were four or five issues they want to get behind. this is one of the bigger ones. and one with the russian trading. we'll see if they can get to that behind them. they said at the ceo said we want to get it is behind us in 2016. the last quarter, he specified in meant the middle of march because that's when they do their foul and. vonnie: based on the russian will it turn in a new administration? the same civil servants investigating, what will happen now that the stance has changed? alison williams: it is a little bit different than what we saw with the doj. and i think the dollars are going to be much less. i think there are other implications in regards a broader implications of business practices and also -- adjust
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ongoing, i guess, reputational risk, if you will. elliott stein has covered that for us. he is our label at -- legal expert. i will leave that to him. i.s. about the dollar impact and the reputational and that seems to be the bigger issue. for example, wells fargo, we have seen it come to bear. a very small fine but big reputational issue. david: let's close the door on the quarterly earnings season. the last of the big six reporting. what is the biggest thing them you see -- theme you see? the next few quarters? alison williams: what is helpful is it helps the revenue run rate. going into next year. we heard almost 2 contrasting from citigroup, they are still going on, a lengthy call. commentary saying we have seen
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it shrink. they think the story will be consolidation and they are gaining share of not necessarily a bigger expanding pie, they are one of the largest global in the business. from goldman, i thought maybe some of the most positive comments from them and all of the banks this season was talking about the extraordinary catalyst that the policies how that is catalyzing conversation and dialogue. you think about goldman and the conversations they have with ,lients, asset management equity, banking, very long-term relationship with some of the largest around the world. they are saying after several years of worrying about global growth, these clients are more engaged. that is apostate for the outlook. tonie: jamie dimon speaking bloomberg earlier today and saying we are waiting too much capital and they should be up to
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lend more. is it that true? alison williams: i think that is something jamie has been talking about. it is a bigger issue for them and relative to peers. they are the biggest. the biggest within businesses and globally. what he was saying today is maybe dodd-frank in total does not need to be thrown out but maybe capital liquidity. that is what we've heard across the banks. there were changes needed. transparency is one of the better things that is needed. one of the better things in that chocolate from it. david: alison williams, a bloomberg intelligence. lloyd blankfein from the world economic forum. this is bloomberg. ♪
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david: it is 1:00 p.m. in new york. i am david gura. vonnie: i am vonnie quinn. ♪
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vonnie: we are covering stories from san francisco to minneapolis at this hour. people are watching. datators weigh economic and corporate earnings. treasury yields are higher and the dollar is gaining since yesterday's trade. are slumpinggets the most in five months after the company cut the fourth quarter and whole year forecast. holiday sales and bad news for kohl's and macy's. maces to a five-year low. israel's ambassador to the united nations, will discuss eu relations from the old administration and the trump administration. julie hyman is here. julie: not much change in stock today. the dow is doing the worst.
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pulling back by 51 points or 0.25%. in the last hour, very little change. very little change to the downside. what is moving and him major averages? we are seeing green, significant green of the month -- among metals. the senate hearing on confirmation hearing for commerce secretary and said we need more focus on tariffs for steel and aluminum anti-dumping. we are seeing some of the still makers that are benefiting in the session. and also industrial products there are doing well that has to do with the granger. earnings, the shares rising about 1.5%. whole., a listing as a those are some of the groups of bucking the downtrend. i want to talk about some trends , reversals we are seeing more recently. take the 10 year note.
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the 10-year note with various moving averages. in particular, 50 day moving average in pink. yesterday was the first going back to late september we saw the 10 year yield falling below that 50 day moving average. bouncing up above it today. at little bit of again. we are seeing again and the u.s. dollar. the dollar versus major trading partners. all in the red are falling versus the dollar led by the mexican peso and canadian dollar. a bit of reversal of trend. when i say reversal, look at the year to date, of the major trading partners with the exception of the pound a peso, are up. a flip of the script we are seeing. as we get closer to the inauguration and beyond it. david: slipping the script for us. first word news. emma chandra has more. emma: thank you.
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president-elect donald trump has been tweeting his and operation of them will bring were -- inauguration will bring record numbers of people. he is going all out. they are courage people to close to washington. 800cials are planning for thousand-900,000 people. a sizable turnout but nowhere near the 1.8 million whole attendant barack obama's first in operation. -- inauguration. nikki haley criticized the obama administration up for the treatment of israel he. she assailed to the president for now blocking a resolution adamic sediments in jerusalem -- blocking a resolution in jerusalem. a corporation will face an action from the protection financial bureau, according to people familiar with the matter.
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mae has known as fannie said to be the subject of a probe into disclosures and fees. bomb filled vehicle attacked a camp. more than 50 people were killed and 100 soldiers wounded. there was no immediate claims of responsibility, suspicion fell on islamic groups in the area. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am emma chandra. this is bloomberg. vonnie: thanks. donald trump changes are dominating the agenda as the world economic forum in sweden. the president of do regulation and tax reform are getting the most attention. john a second down with the jpmorgan president and ceo jamie dimon. jamie was asked that he really
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wants trump to change. one is legislation. it is harder to do in changing regulation. regulators can change a lot easily but compliance and costs as sorting -- certain rules of landed and how you lose does use liquidity, i would like to see them look that and modified a bit. i think it would be good for the economy. when you go to all of the banks i know and if we reduce this a little bit, would you be more aggressive in lending? and yes, they would. it would have the economy. some of the legislation, people ask about dodd-frank, i am not for thrown get out wholesale. no one in their rational mind can say everything was done and how it was done was done right. and thes of things done consistent, coherent, it makes sense that after a while to open it up and look what we did and
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not did and modify it and change it to accomplish what we want to do what i call good regulation. --orter: won't be at the top what would be at the top of your list? jamie dimon: gold plating capital and requirements and i would look at that again. look at liquidity ratios. in the united states of america, $2.5 trillion sitting in the central-bank called excess reserves. reservesd days, exes meant you are free to lend it. we are not free to lend it. we are not free to linda because of the new requirements. regulatory requirements are deeply affecting monetary policy. i am not sure we understand that. i am not saying get rid of it will look at how you calibrated them and see how they reduce lending and make a bit of a change in. report: a problem with liquidity rather than --
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jamie dimon: capital, too. we do not have in 2007. jpmorgan was not bell doubt that plaintiff capital. we have almost three times as much capital. out and we did not have the capital. there's operational risk. i call it capital. $32 billion. it is sitting there. it will sit there forever. even if you get out of the business that caused it, i am not against it, that is too much. forager billion dollars, i think so. that is direct money that you cannot the land. cannot you use at all. >> some argue against it. you had pretty good earnings. goldman had good earnings. some people would say that the times are back on wall street despite all of this regulation. jamie dimon: a long time period.
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forget jpmorgan for minute. .ery low growth, not earning we are doing fine. but, the fact is if you look at the whole banking industry, a way to let them be free to do their job. >> you're surrounded by other global finance and you're one of the most nationalize industries in the world where it is divided by region. in a different world, you would be think about buying the european bank, is that a source of anguish for you? jamie dimon: yeah. i would like to be in the position to do something overseas that was beneficial for my shareholder in the country to operate. we are on the ground in six the countries. we try to be great for one day -- for the most part, we could grow organically. strategy?ing my not really. >> stopping the rationalization of an industry?
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more so in yes, europe. you would see more consolidated banks and european banks. we have gone backwards. where the regulators and the european politicians decided they want to go back to common market, which i think they should by the way, it's completely different direction. >> that would be deutsche bank which was being mentioned as a direct rival. do you feel it is gone bit -- back a bit? jamie dimon: i have all of the respect for my competitors. they have a tough time. back to capital and diversification. one of our strengths is we are huge with diversifying, consumer, for the, sme, global banking, a cross-border flows. that is a source of strength. during the crisis, we never lost money in a quarter. think if you do look at other banks, deutsche bank, in particular, if they
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were able to expand in other countries and this is, that we have a more sound business model that would not be resting on one leg of the store. mixed-american banks, a look at donald trump. at one point, he kaluz and regulations or simplify it in that way. might getht think he a nationalistic attitude toward banking and a lot of things a champion american banks against others. is there something in that? the big picture first printed the positive attributes that people feel right now about the trump administration syntax reform which we desperately need, growth policy in the united states, we need jobs and we desperately need. growth is good for everybody. it dries global growth. people were rid about a little bit, maybe blown out of proportion as trade. andening to tweets
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one-liners and statements like that of which of the president-elect has said, i negotiated that wait for the art of the deal, he does that. very serious people in the job now. i know steven mnuchin and wilbur ross a rex tillerson, these are successful, smart, global -- theou cleverly avoided trade. china. gary is a national economic adviser. you could look at trade with china say there are flaws. vonnie: that was jamie dimon of from dolls, switzerland -- dav os, switzerland. avid: content is king fortune. a look here. i think the senate commerce committee, wilbur ross, the confirmation hearing on going right now.
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questions about nafta and other trade desperate president-elect donald trump said he plans to give the commerce secretary more power over negotiating those deals. ross said all aspects will be put on the table. the three others on capitol hill through the afternoon. this is bloomberg. ♪ >> infrastructure has include broadband deployment and the underserved and unserved areas. since you have --
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david: this is "bloomberg markets." i am david gura. vonnie: i am vonnie quinn. some of the biggest business stories in the news. deutsche bank told some employees that job cuts will go on after bonuses were slashes,
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according to a person with knowledge. they are planning to eliminate 9000 jobs globally through 2018. 9% reduction across the firm. andit suisse and the u.s. justice department finalize the $5.3 trillion agreement to settle a probe into the bank's sales before the financial crisis. the usa today spent -- the u.s. said they spent a billion dollars in relief. an admission from the bank that had loans they knew were likely to fail. shareholders have until midnight to decide whether to hold control -- over to carl icahn. the billionaire investor owns 82% of the company and extended the offer for the rest of the manufacturer by one day. icon raised the bid, the third increase since his search has in the buyout. the company said it will not raise the bid again under "any
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circumstances." bloombergur latest flash. david: netflix will release fourth-quarter sales after the bell today. cory johnson in san francisco. give us a sense of how much growth analysts are expecting to see. cory: well, as far as analysts' expectations, the support is content. the contents, the original content for netflix is a very different businesses than a couple of years ago because of the money they are sinking that the content. the way that change the business. there are so important because they are part of a long-term plan. it is a set up for marvel defenders movie that will not be a netflix movie but will support a for structure like jessica jones and others. they have a big plan, daredevil is another one.
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they started to crate this infrastructure in the water world of content to drive subscriber growth of the long-term. the problem is, a significant expense. when we look at how they are growing subscribers, want to keep in mind how they are supported through content expenditures. a subscriber base of 87 million. the pace the subscribers are growing is an important part of it. a subscriber growth in percentage is pretty invest the right way to look at it. subscribers can do stuff for year. the pace of growth has slowed down a little bit. they have good additions by going big into europe and other localities. the benefits are starting to slow. vonnie: it is always been the question for netflix, how much does it end up paying for the likes of kevin spacey and the next big hit? are we seeing it hurt a little? cory: i think one of the things to look that is what happens in
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the market for a long time. numbers in the u.s. where they have been a long time, dozens reiber -- the subscriber growth rate. you are not new to an environment. you see it really slowing down. it shows you why it is so important to grow internationally. and what the future might hold for these guys as they start to saturate other markets. david: i read a p is colleague on "bloomberg businessweek" looking at netflix global expansion. to get well of these big markets. how much time do they have to do that? they have all of this money. if i was a working actor in hollywood, i will not go anywhere else. how much patience will investors have for netflix to get it done? to thet speaks larger larger market, how patient investors are period for companies and there are not generating big sums of money. the thing about subscriber
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growth, it is governed by the company. the company can decide home and subscribers they want by how much and they spend on marketing. i look at marketing as a percentage of revenue for how fast they want to grow subscribers. as i can put the pedal to the metal and gross subscribers. it looks promising. upn last quarter, they put 12.3 percent number. not a huge difference over the previous quarter but 200 basis points. that is one of the numbers that i will be focused on whether report as a close today. how much they are willing to spend to hit the subscriber number. that's all wall street haze attention to. vonnie: is there evidence of that there is a service picking up subscribers that might stop describing to netflix? cory: look -- here is the concern. this number. haveommitments that they made to content that they have to pay out in the future.
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it does not show up in margin so much because they do not have the expensive yet. they have $14 billion minimum contractor for content going forward. the number is only going to go up because they are in a competitive environment. it does not matter so much show or fx hasumbers numbers or whoever is spend it on original content. the spending of original content, it is a bidding war, spending a lot of money on content that is raising the cost for netflix and commitments and contingencies. unless some other competitors give up in the arms race, the battle is on and the costs will behind it is a proper netflix and everybody else. david: cory johnson. you could hear more when he is joined in half an hour on bloomberg radio. -- targetill ahead shares plunging after they cut forecast. big retailer next. this is bloomberg. ♪
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david: and this is "bloomberg markets." vonnie: holiday pain spreading to retailers. most inhares down the five months after cutting fourth-quarter sales and the whole year after disappointing holiday sales. poonam, we saw this coming. is it a freight train that we cannot do anything about? all about store traffic. we have seen this for most reports. store traffic continues to be down and retailers are challenged. they do not know how to transfer the sales going online back into the store. david: when you ever retailer like target or walmart, a big
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box retailer and concrete footprint trying to get online. how do they to read that needle? walmart has had mixed success get into to come to the website. after know they are sacrificing some in-store traffic. poonam goyal: to compete in the current market, you have to be online. you saw it with walmart. they acquired jet.com. target, their online business is strong. yes, it is a big expense of in-store traffic. they said the signature were up 3% for the holiday season. you do not need to go to the store to buy apparel. vonnie: i guess -- and the idea that online retailers are less percent -- less than 10% of totals is baffling to me. these retailers are hurting so much, you think it would be less than 10%. poonam goyal: it is really not. the big-box retailers, less than 10%.
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for walmart, 2%-3% of all sales are online. small number for many of the brick and mortar, especially the big-box retailers. they are growing double digits. target, 40 percent for december, 30% for holiday. big numbers. david: what do target assay for the problems going forward -- say for the problems going forward? their way forward? poonam goyal: i think they will have to continue to find ways to drive the traffic back to stores. if it is wellness or maybe more food -- not food like walmart or more organics. seems they get you back into the store. buy online pick up in-store is a huge initiative by others that would help drive the traffic back to the store. store only deals. moree: look for the middle-market to lower market stores, what about luxury?
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poonam goyal: luxury is interesting. you do buy online and go to the store. then theem is currency consumer not having the appetite is spent. once again, the store traffic continues to be a headwind. that is agnostic. that is just continuing. vonnie: retail analyst poonam goyal, thank you for joining us. david: salesforce ceo from switzerland. in 2017.hts on growth that is coming up next. this is bloomberg. ♪ with the xfinity tv app,
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anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen.
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download the xfinity tv app today. vonnie: and i am vonnie quinn. david: i am david gura. let's get first word news.
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emma: president-elect donald trump is not planning for a ban of nato, but he believes it needs an update. that is according to a top aide, who says trump the leaves the current accord is based on foreign policy and not economics. he says europe is threatened economically and is in need of usl. president-elect trump talked to andrew cuomo for nearly one hour today. cuomo says he talked about the impact of federal spending on state budget spirit the governor said they discussed the impacts of federal tax policy in the potential appeal of the act on new york state. cuomo could possibly be a presidential candidate in 2020. price -- vice president is in davos, and he says who 10 is trying to undermine the european alliance. -- he said an attack on one member is an attack on all. the widow of the orlando,
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florida, nightclub gun man is in court today. she faces a transfer of her case to federal court in orlando. she was arrested in california for allegedly knowing that her husband, omar mateen, was planning the june attack that killed 49 people. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: thank you. south carolina governor nikki haley's confirmation for u.s. ambassador to the united nations is underway. if confirmed, one of her first priorities will be to bring u.s. lawmakers' threats to cut funding of israel to the global body's doorstep. danny danon is israel ambassador to the united nations. i know you had a problem with the abstention, the fact that the u.s. abstained to vote on the resolution on settlements.
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14-0 in the united nations. how will the outlook change once the incoming administration is u.n.ace and there is a new ambassador rice from the u.s.? danny: we have a strong relationship. unfortunately, what happened last month is the u.s. allowed a resolution to pass, and we were very disappointed. we look forward to working with governor haley as u.s. ambassador. we have a lot to fix at the u.n. there is anti-semitism in the u.n., and we expect to work with governor haley to fix it. ideae: there has been an that balkanization is increasingly happening. do you think there is more of a separation among the jewish community?
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among the jewish community in christian community -- when you see what is happening in the middle east. terrorism in jerusalem just last sunday. so there is an stability, and we have a lot of things to do together. danny: i noted during the campaign a difference in rhetoric. donald trump talked about the u.s. relationship with israel. help me dig into the specifics, aside from the rhetoric. what has he offered policy wise that is appealing to you? what is different? danny: rhetoric is very important. in the u.n., people look at the relationship with the u.s. everybody.ting we appreciate the strong statements of the elected
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president. and there is the issue of the embassy. the president-elect says he will move the embassy from tel aviv to jerusalem, which is very meaningful. jerusalem is the capital of the jewish people for 3000 years. david: you mentioned the u.s. that supporting this resolution. how would you characterize your relationship with the outgoing ambassador? was their support there? >> we have a great relationship, and we appreciate the work with ambassador power. we had great achievements. be the chairman of the legal committee of the u.n., and we had great achievements together. but we cannot ignore the crucial decisions, not her decisions, but the president instructed her to vote. unfortunately, people will not
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remember all the great things we did together. they will remember the shameful resolution that passed december 27. vonnie: remember that it was an abstention. danny: it is more than that. the u.s. is pushing for it. resolution --the yesterday, we had another security council meeting, and now other countries are starting to realize that this was a one-cited shameful resolution -- a one-sided shameful resolution. vonnie: 13 other votes were for the resolution. why isn't the increasing economic and political dialogue israel is having with all these other countries, why is that not translating at the u.n. yet? is but anyuse it resolution that comes regarding
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israel, and people are looking at the u.s. and following the u.s. and fortunately would have it was a change of the policy of the u.s. in 2011, president obama said publicly that the way to promote peace in the middle east is not through the u.n., not through which wasty council, negotiating, so why change his own policy? we feel bad about it. it was the last minute. i do not have any exclamation -- explanation why they decided to change. it is a long-standing policy. : when your prime minister meets with the new is -- is hewhat s going to say about a way forward? would you like to pursue a peace process? what will be the first priority? danny: we are welcome to new ideas.
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it is not working, we can agree about that. if the u.s. will support it, we're happy about it. even other countries, we welcome their involvement. they need to talk to the israelis. that is how it is with jordan, with egypt here and you cannot achieve he's through a summit like they are having in france without the israelis and the palestinians. do that without having the palestinians negotiate with the israelis? vonnie: you talk about the idea that the busy being moved from tel aviv to jerusalem is a good thing. what other things would you want the administration to put into action? danny: the prime minister is preparing the material for meeting with the president-elect. we have a lot of issues -- iran, hezbollah, hamas. we will bring all of those
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issues. we think the u.s. would be more involved with the u.n. and reform it. i think it is about $3 billion a year. the u.s. should demand more from the u.n. a biased approach against israel, and i think the u.s. should be part of the change. vonnie: the president-elect says he wants to see things change of the united nations and it could be a better organization. with russia and iran, if the u.s. works with russia in syria, does that change things for you? danny: we share our vision with washington and the pentagon. israel is the strongest ally of the u.s., and we appreciate that. we value the relationship. syria, and lebanon,
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israel is the strongest ally of the u.s. quality of this relationship between israel and the united states, some people will say that friends and allies can disagree. fear, perhaps there was disagreement over the settlement issue. are you saying there is no worry for that kind of disagreement? when you come to the u.n., and you can ask ambassador powell and ambassador haley, you do not take your friend to the security council and allow other countries, like venezuela and one-sidedto have a resolution. not at the security council. vonnie: what you know about the incoming administration, is a two-state solution alive? danny: he wants to negotiate and is willing to discuss everything with the palestinians, but you
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need them to come into the room and negotiate. the palestinians feel they can achieve a palestinian state -- we are willing to discuss everything, but he needs to negotiate with the palestinians. 's ambassador to the united nations, thank you for joining us. danny: up next, the salesforce ceo marc benioff to talk about his competitors. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i am vonnie quinn. david: and i am david gura. it is time for the bloomberg business flash, a look at some of the biggest business stories in the news.
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new york visit top cop looking at whether a company closed elderly borrowers into for closure. the tickerhin, treasury secretary, was a chairman. the investigation became weeks before he was nominated by donald trump. jingpingresident xi met with government officials in geneva to express a wide -- and discuss a wide range of topics, including chinese banks and the swiss city. attended the forum in davos and started a call for free trade, saying no one wins in a trade war. the euro region disintegrates without support from populist leaders. that is according to jamie dimon, he said he hopes eu leaders would example what led the united kingdom both to leave and then make adjustments. he says if national politicians rise to power, the eurozone may
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not survive. and that is your business flash update. vonnie: turning to davos, switzerland, now, marc benioff spoke with tom keene earlier today at the world economic forum, and they discussed salesforce's growth trajectory and competition. >> we had to do what we were doing from the beginning, which was connect with our customers and help them connect with their customers in a new way. that is what is so exciting about what salesforce does today. int is why so many companies davos are using salesforce. on,e is a sea change going and companies are working hard to develop that customer intimacy. tom: you have a lot of competition. jeff bezos just bought the largest house in washington. it is not only how you compete with amazon but how you compete
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with the other contenders to what you invented. partner ofs a great ours, and amazon uses salesforce to connect to its customers in sales, service, and marketing. and we work with a lot of amazing retailers, like louis vuitton. tom: [indiscernible] retailers that are getting slaughtered in the brick-and-mortar world, they need salesforce to connect with their customers in a new way. these are exciting times. tom: they are exciting times for anybody making money, but you have critics. how are you going to position salesforce within the new technology? you are one of the few technologies here. how are you going to reposition for the next five years? i cannot imagine five years. >> when we started our business
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in 1999, crm or customer, management, was a small market. now it will be the largest segment of enterprise software by 2020, a $100 billion game. we are number one in that segment today, and we're continuing to innovate and look for ways to help our customers become more successful. important is the concept of apple, not only the trajectory the stock has been on -- >> i have known that company for a long time. experts.le are apple you are one of the few -- you were there as an intern out of usc. steve jobs walking around. is this apple the same as the apple of 1984 and that super bowl commercial? same,ts of it are the that kind of iconoclastic feeling that we are going to change the world, we know what is right and you don't. that part is the same. what is different is steve jobs
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is not there. he is probably the greatest visionary of our industry of all time, and he changed the world. it is hard to be a tech company without your visionary. they are doing their best, but it is not easy. i will tell you, it is kind of funny in that they have a lot of great new products -- i mean, i love even the new year pods -- ear pods. they're doing innovative things, but it is hard without him. om: your world -- in your world , how does salesforce.com and your competitors handle the cloud through whichever phone we have in our hand, business or personal? >> that is fascinating how you think about computing today. you made a huge shift in your
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mind from where we started with personal computers into the most popular computer today, the mobile phone. $20they are making them for so that everybody can have a computer far more powerful than the most powerful macintosh. you knew the lease up before the lisa was lisa. that is something now in your pocket that is way beyond that capability. but no computers are going to disappear because we see things , googlexa from amazon home, and others, where we are just talking to our computers as we walk into a room or talking to our watch. that is incredible next generation of computing. populism from davos -- that is old news. the new idea is the idea of davos and the uncertainty. i have never seen so much like of confidence here in public
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policy, philanthropy, where business is going right now. what would be your counsel to mr. trump as he becomes president and considers american technology and innovation? what is his first to-do list? do not completely agree with your analysis. the009 and 2010, during financial crisis, things were a lot worse here at were pretty dour in their view of the woes happening, and they were really worried. it was the brink of a global financial collapse just a few years ago. now there is political anxiety, but i do not think they have economic anxiety. tom: how is mr. trump a technologist? >> i hope he is surrounding his of with great people. we know that the kids that are in high school today and college have a capability and fluidity with computers that even you and i do not have.
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of course, he is seven years old and will have a different experience with computers, so he will be surrounding himself with smart people that she is 70 years old and will have a different experience with computers, so he is surrounding himself with smart people and experts. vonnie: that was marc benioff of the world economic forum in davos, switzerland. willg up, president obama give his final news conference as president today at 2:15 eastern time. bloomberg will have live coverage. david: wilbur ross is before the senate. senator nelson of florida questioning him now. wilbur ross has called china the most for technician -- protect mitch -- the most protectionist of world economic economies. this is bloomberg. ♪
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david: this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. president-elect donald trump dig events to claims made by some of the media that the recent job announcements were not all because of him. he tweeted today -- totally biased as nbc news went out of its way to say that big announcement about jobs commitment to the u.s. had nothing to do with trump -- more fake news. top ceo's of those companies came back because of me. bloomberg took a similar look at these claims. joining as is rick clough. how are you? let's look at the claims and debunk them if they are to be debunked. >> it does appear that most of them probably cannot be attributed to trump. that is not to say all of them
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are bogus, but a lot of them seem to be repackaged versions of earlier announcements. you have a lot of the announcements recently, and companies are clearly trying to play to trump. but you look at a company like walmart that has been talking about opening up new stores and creating potentially 10,000 new retail jobs, but actually that is part of the u.s. spending plan that was already announced. the interesting thing if you look at that case is when they first announced it, they characterized it as more of a slowdown in new stores, but now they are playing it up as a growth point. david: how are these companies reacting to donald trump taking credit? the ceo of chrysler said he is fine about the prospect of this happening. how about others? >> they are ambivalent. in some cases, they are totally fine with it.
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i think some are glad to let him take credit. really, part of this for a lot of companies is trying to get on trump's good side. nobody wants to be the target of one of his twitter attacks. for some companies, it is about getting ahead of a possible attack in giving him a win early on. vonnie: it is all pr, right? does any of it add up to net new jobs? >> we tried to take a fairly comprehensive look at the new announcement, new u.s. job announcements that have been made since the election, and we have come up with a little over 200,000 new jobs, which sounds like a big number, but in the grand scheme of things, it really is not that big. it was about 100 45 million employees in the u.s., a fraction of 1%. david: quickly, is the prospect of this continuing -- more
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tweets like this, any indication that companies will continue to be singled out? >> there has been no sign that he is slowing down. i think companies have been bracing and trying to figure out how to prepare for a situation like that. it looks like he is going to keep singling out companies. david: thank you. speaksup, janet yellen at an event in san francisco today at 3:00 eastern time. the beige book coming out of the top of the hour, as well. we will cover that on bloomberg television with mike mckee. this is bloomberg. ♪
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"bloombergs is markets." we are moments away from the release of economic conditions in the fed's 12 districts. it is the first of eight this
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year. from new york, i am scarlet fu. oliver: and i am oliver renick here at stocks have gone nowhere. they have been flat for most of the day. the dow is hurting a little bit at some of the financial companies have gone down after earnings. mike mckee is taking out that beige book headline. mike: does not look like there is a lot here that will surprise anybody in the markets. pressure has improved somewhat -- intensified somewhat. many districts see the job market tightening further in 2017, all stuff we have heard from the fed before. the labor market is tightening, and eight of the 12 districts .eported modest price increases most areas of the economy continued to see modest growth. the headlines first
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out of the summary sentence from the federal reserve. they are not seeing any real change in the economy. it is interesting because we saw a couple retailers report slow sales in december, and we had an industrial production report that was not that strong the roots of the fact that companies are telling the fed that things went along ok over the last six weeks is relatively good. does not mean a whole lot. scarlet: growth in the energy industry is mixed. some retail sales rose. ,ut if you look at the company target is the latest company to reduce the fourth quarter profit forecast. mike: the energy news has been terrible for a couple years, so the energy news is good. that is one of the reasons we have seen so many layoffs in manufacturing and a decline in business investment, because factories went away. now they are starting to come back with oil prices up. the fed also says the labor market, some districts -- companies are finding it hard to
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find people for some jobs. that has been an ongoing theme. it is a steady issue goes report. theyary 1 is the day announced their decision. this does not give me any reason to think they will need to raise rates at that meeting them and given their history, they will probably want to wait and see. scarlet: mike mckee will look through the beige book further. we want to check on markets. not a lot of action. has that changed? julie: it has not. stocks steady. rates also pretty steady with where they were before. averages, very little changed. the dow the most changed with a drop of about 46 points. when you get commentary from the fed about the economy, when there is reaction, one would expect it to be in the treasury department -- market. a selloff resumes in treasuries.
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we are not seeing any kind of big reaction to the beige book itself. a seven basis point rise for the 10-year yelled, up to 2.39%. a lack of big movement in the major averages. i want to get more granular and talk about stocks on the move. meadines having to do with johnson nutrition that are sending shares higher. the street insider blog is reporting that nestlé could be interested in buying the company . what is interesting is a blog previously reported that perhaps nestlé or dan and could be interested in the company, and that was last march. shares proceeded to the high of the year in july and then fell by about 20% when no bids materialized. we will see if this or peds that pattern and if -- if this repeats that pattern. elsewhere, we got a lot of earnings reports. we're getting more acceleration there.
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citigroup and goldman sachs in the banking sector. what unites these two and the banking sector is an increase in bond trading revenue, an acceleration. is it going to continue? that is the question. if you look at the various banks in the 2016 bond trading revenue versus 2015, orange is 2016 and yellow is 2015, and all of them saw increases over the prior year. but citigroup says it does not expect fixed income currencies and commodities to show tremendous growth. but goldman sachs was fairly optimistic about this year but did not give specifics in terms of that growth. that, combined with the fact that we do not get specific outlooks, perhaps waiting on shares of some of these companies. some earnings disappointments, one from target them a cutting its fourth quarter earnings forecast because of weak traffic it stores.
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penny.sing by a there has been a run-up in shares, up about 60% over the past year. withern trust also down fourth-quarter earnings falling short of estimates, in part because of higher expenses. some notable earnings disappointments today. that is one of the things holding back gains in major averages. scarlet: thank you. we are awaiting president obama's final news conference of his presidency. there is a live shot of the white house briefing room. it is a packed house right now. meantime, let's bring back mike mckee for more on the beige book. and janet yellen will be giving a speech at 3:00 p.m. first, when we look at the fed beige book, to what extent do policymakers fold in t anecdotes, the reports from the 12he regional districts, into their policymaking?
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mike: they look at their own district and the governors can take all this in. this affecting the san francisco fed president, it does not really happened. the beige book is a steady as she goes kind of report. what is interesting is a number of districts reporting labor shortages. they all say the labor market is growing, getting stronger, and that wage pressures are starting to rise. an oath that retail sales and a number of districts are disappointing. people still not ready to go out with animal spirits and spend a lot of money. we have seen consumer confidence go up, but we are not seeing spending go up at the same time. oliver: consumer confidence helps when wages are higher. where does the wages never fit into this? mike: they suggest in here that the of that may have been
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rise in minimum wages coming up in a number of states. we're seeing wages go up. so far, it is not bolstering spending. that is the next connection. we have been waiting for the low unemployment rate to start pushing wages higher and people start spending more money. the report does not suggest that is happening, but it is not really say there is a problem either. scarlet: we got headlines from the prepared senate testimony of steven mnuchin, donald trump's treasury secretary nominee. he said he had nothing to do with indymac's risky loans. he says he worked diligently to keep homeowners and homes. this goes back to the company that he owned before he went on to become a hollywood producer. after he left goldman sachs, he formed his own company which entailed buying the assets from a mortgage lender.
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mike: indymac, and they turned it into one west bank, and there are reports, including one that went to the attorney general of california, that an alleged it was a foreclosure machine that made a lot of money taking people's houses away from them, and they did that with robo signing and other illegal activities. they did not investigate whether they were actually able to foreclose are not. now the california secretary of state is another the senator from california and decided not to prosecute, but litter will -- butt liberal groups liberal groups have focused on him and his foreclosure machine, putting up a website saying anybody who was a victim, please let us know, and they are trying to bring a lot of pressure on him. he says he wants to correct the record, he was not a foreclosure machine and did not profit from other people's misery. he said he will work to
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ensure there is no repeat similar to the 2008 crisis. he used the phrase for closure machine, saying that is not true. with this part of the industry and the economy in 2008, does it give some assurance that this is somebody who knows how to navigate that field? mike: one would assume that with his background on wall street and running this bank that he would have a very good feel or what goes on in the securities industry. the question is, did he do something that he should not have done? for that. be hearings it does not look like the democrats can stop him, but they will make his life very uncomfortable during the hearing talking about this stuff. but no, it from him about his prepared remarks about the dollar, which is usually one of the first questions everybody wants to know from the new treasury secretary.
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upset the currency markets this week, what donald trump said, so it will be interesting to see how long it takes for somebody to ask him about that. scarlet: or maybe donald trouble take that on. let's look ahead to janet yellen, who will be speaking at 3:00 p.m. eastern time. what is the focus of this speech? is it realistic to believe she might drop hands on monetary policy are? mike: um, no. this beach could go in a number of directions are not guess is that she's going to reassure people that they are looking at in economic fundamentals making the decision that the economy has gotten smart enough that it justified a rate increase in december and will justify three more rate increases in the coming year, and she will keep an eye on what happens with fiscal policy, but they do not have enough information on what trouble about it -- trumponomics will produce.
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oliver: given your time covering the fed and talking with chairwoman yellen, do you think that is a move into the tom: administration come -- the trump administration, he has floated dissatisfaction with yellen. does that make her more loose lips? mike: i do not think so. that is not her style. remember the battle with larry summers. it was a behind the scenes game. she did not go out in public, as summers did on some occasions. she probably will do that again. donald trump has not had a chance to -- he has good-sized the fed's policies, but he has a lot of ignorance -- he has criticized the fed's policies. it is a problem for down the road. he does not need to worry about it until the fall when he needs to decide whether to reappoint her and stanley fischer as a vice chair.
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so she has some time. i expect that it will not be an immediate fed rate increase. they will wait until may and they really consider it after the february 1 meeting and then march 15. that is probably still early to judge what the impact of any policies going through congress will be. they want to get a feel of how this might affect the economy, whether it will push growth of quickly, whether it will affect the dollar, and whether it impacts the overall economy. michaela very flexible mckee, starting with the beige book in than speculating about janet yellen. yellen will be speaking at 3:00 p.m. eastern in san francisco here we will be bringing your that. >> president obama will hold his final news conference moments from now. he is excepted to defend his decision to shorten the sentence of convicted weaker chelsea manning. he will also talk about his
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vision for the country after he is no longer president and his commitment to work closely with the incoming trump of administration. president-elect donald trump's pay for health secret he said access and affordability were his goals for revamping health care, and your for assurances that the new administration is not planning to launch a medicare overhaul. congressman tom price talked about health, education, labor, and pensions at the start of his confirmation process but at times it turned contentious. president-elect donald trump's choice to head the epa says climate change is real or press by democrats today, oklahoma attorney general scott pruitt said he disagreed with trump up past claims a global warming is a hoax created by china to harm u.s. economic repetitiveness. new jersey governor chris christie says he turned down several jobs in the trump administration because his wife
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refused to move to washington. speaking on a new york radio station, he said the president-elect do not offer jobs he considered exciting enough to leave his family. chris christie is in the final year of his second and last term as governor. scarlet: global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. for a up, we are waiting news conference for president obama, the final news conference of his presidency. there is a live shot of the briefing room in the white house. janet yellen also do does beget the top of the hour. we will take that live, as well. from new york, this is bloomberg. ♪
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scarlet: this is "bloomberg markets." oliver: president obama is due to give his final news conference as president any moment from the white house. we will bring you the remarks as soon as they start. incoming president trump has repeated his pledge to shake up washington time and time again. one part is a proposed constitutional amendment that would propose term limits on all members of congress, part of his plan to "drain the swamp." what are the chances it will pass? let's look at the issue of term limits first. >> donald trump talked a lot about draining the swamp during his campaign, and one of the elements was to impose term limits on congress. this would include six-year limits on house members, three terms. 12-year limits on senators, two
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terms. harder tobe a lot actually implement, and it is not something he has talked about as much or at all since he actually won the election. the last time congress looked at term limits was back in 1995 after the supreme court said it is not constitutional to impose term limits on members of congress. the only vote that resulted in the majority fell well short of the two-thirds majority needed to advance it to the senate. another similar result the following year, and it has not been tried since. most members to not want term limits. make that aecides to signature push and decides to go for the grassroots campaign, it might the awkward for republicans to ignore it. there is a warning for people who watch government closely. they say listen careful about imposing something like term limits, because you could end up increasing the power, not
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increasing the power of lobbyists, because members who were in office for less time tend to need to rely more on the help of outsiders, usually paid lobbyists, as opposed to people who have developed serious expertise of their own. oliver: donald trump has also banne registeredd state and federal lobbyists. trump up also decreed a ban and a lobbying lifetime ban on advising foreign governments. a ban on government white hiring freeze. how are these moves viewed, and will they make a difference? >> i know what i think. i think all the lobbying stuff is good. i am pro drain and anti-lobbyist. i think the term limits idea is bad, wrong, and unconstitutional . i do not think they will get anywhere. bad for democracy.
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>> do you think term limits worked in the states? >> there is a ballot box. we should fix campaign-finance reform. >> it is interesting. skeptics, irump, ask them why he is doing these things -- is it symbolism? trump has been an employer of lobbyists and has used them effectively. will be interesting to the obama white house and clinton white house both had limits on lobbyist's but a lot of exceptions. >> many exceptions. seet will be interesting to of trump has exceptions to review do lose people. lobbying is protected by the first amendment. >> i've it, but you still have to have work in government. >> people thought trump would have trouble recruiting people
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into government, and he really has not. obviously some people have said no. made a great hire. >> tillerson leaving exxon. he got some really good people to agree to work in his government. i think these kind of restrictions sometimes deter that, but he is getting good people. this stuff is small. term limits will never pass. i am a little bit less against it then you are, although i am against it with the evidence will be quick incoming. by the end of the first year, we will look around washington to see if this stuff has made a difference. less towards special interests and more towards working class or real americans. atver: they will be looking the key issues facing the incoming trump up administration or tonight they will break down the president-elect's plan to
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"drain the swamp or coke be sure to watch inauguration coverage on friday starting at 10:00 a.m. eastern time. he takes the oath of office at 12:00 noon. vonnie: we are awaiting the final news conference of president obama's presidency. we will keep you posted. also coming up at the top of the next hour, janet yellen is speaking in san francisco. we will take those remarks, along with the q&a portion, live. this is bloomberg. ♪
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on the: let's listen in final news conference of president obama's presidency. president obama: i covered a lot of the ground that i would want to cover in my farewell address last week, so i am going to say
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a couple of quick things before i take questions. first, we have been in touch with the bush family today after george about president h.w. bush and barbara bush being admitted to the hospital this morning. they have not only dedicated their lives to this country, been a constant source of friendship, support, good counsel for michelle and me over the years. they are as fine a couple as we we want to send our prayers and our love to them. really good people. second thing you want to do is to thank all of you. some of you have been covering me for a long time, folks like christy and lynn. some of you have been covering me for a long time. some of you i have just gotten to know.
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we have traveled the world together. we did a few singles, a few doubles together. i have offered advice that i thought was pretty sound, like don't do stupid stuff. and even when you complained about my long answers, i just want you to know that the only reason they were long was because you asked six-part questions. but i have enjoyed working with all of you. that does not mean i have enjoyed every story that you have filed, but that is the point of this relationship. defensesupposed recent -- you are supposed to be skeptics and ask me tough questions. you are not supposed to be complementary, but you are supposed to cast a critical eye on folks are holding arm is power and make sure that we are accountable to the people who sent us here, and you have done that.
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and you have done it, for the couldart, in ways that i appreciate for fairness, even if i did not always agree with your conclusions. and having you in this building has made this place work better. it keeps us honest, makes us work harder. about how weink are doing what we do and whether or not we are able to deliver on what has been requested by our constituents. for example, every time you have asked, why haven't you cured ebola yet? the ability me to go back to my team and say, will you get this solved before my next press conference? i spent a lot of time in my farewell address talking about the state of our democracy. it goes without saying that
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essential to that is a free press. place, part of how this this country, this grand experiment in self-government has to work. it does not work if we do not have a well-informed citizenry, and you are the conduit to which they receive the information about what is taking place in the halls of power. so america needs you, and our democracy needs you. we need to you -- we need you to establish a baseline of facts they can be used as a starting point for the kind of reasons and informed debates that ultimately lead to progress. so my hope is that you will continue with the same tenacity to do thehowed us hard work of getting to the bottom of stories and getting them right and to push those of us in power to be the best
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version of ourselves and push this country to be the best version of itself. i have no doubt that you will do so. i am looking forward to be an active consumer of your work, rather than always the subject of it. i want to thank you all for your extraordinary service to our democracy and with that, i will take some questions. >> thank you, sir. that commutinged the chelsea manning sentence will send a message that leaking --ssified material will not how do you reconcile that in ?ight of wikileaks related to that, julian assange has no offer to come to the united states he would are you seeking that, and will he be charged or arrested? president obama: well, first of all, let's be clear, chelsea
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as halfhas served prison sentence. so the notion that the average person who was thinking about disclosing vital classified information would think that it unpunished, i don't think would give that -- get the sensession from that chelsea manning has served. that given my view that duewent to trial, process was carried out, that she took responsibility for her crime, that the senses she received was very
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disproportionate relative to and others had received, that she had served a significant amount of time, that it made sense to commute and not parted her sentence. very comfortable that justice has been served and that a message has still been sent that when it comes to our national security, that were who possible, we need folks may have legitimate concerns about the actions of governments or superiors or the agencies in which they work, that they tried to work through the established .hannels and avail themselves i recognize some folks think they are not enough. all of us when we are
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working in big institutions may find ourselves at times at odds with policies that are set. when it comes to national security, we are often dealing whoseeople in the field lives may be put at risk or, you know, the safety and security and the ability of our military and intelligence or embassy to function effectively. that has to be kept in mind. with respect to wikileaks, i do not see a contradiction. i haven't commented on wikileaks generally. conclusions of the intelligence respect to the russian hacking were not conclusive to whether wikileaks was winning or not in being a heardt through which we
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about the dnc emails that were early. attentionay a lot of to the tweets, so that was not a consideration in this instance. i refer you to the justice department for criminal investigations, investigative issues that may come up with him. in thisy broadly that we are going to have to make sure we work to find the right balance of accountability and transparency that is the hallmark of our democracy but also that there actorsersaries and bad out there, who want to use those whetherthat hurt us,
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that is trying to commit financial crimes or trying to ormit acts of terrorism, folks who want to interfere with our elections. we have to continually build the kind of architecture to make our democracyof is preserved, that our national security and intelligence agencies have the ability to carry out democracy in a way that still keeps citizens up to speed on what the government is doing on their behalf. with respect to chelsea manning, i look to the particulars of the case the same way i have with other pardons i have done. i felt that in light of all of these circumstances, that commuting her sentence was entirely appropriate.
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morgan. >> thank you. the president-elect said he would consider lifting sanctions on russia. given your own efforts at arms control, do you think that is an knowing therategy, office, how would you advise his advisers to help him be effective when he deals with vladimir putin and given your actions on russia, do you think of those sanctions should be viewed as leverage? president obama: number one, it is in america's interest in the we have aterest that constructive relationship with russia and that has been my approach. at the giving of my term, i did what i could to encourage russia
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to be a constructive member of the international community. with the work president and the government of them diversify their economy, improve their economy, use incredible talented -- incredible talent of the russian people in these ways, i think it is fair to say after president came back into presidency, and escalating -- escalating anti-american rhetoric, and an approach to seemed to bes that premised on the idea that whatever america destroyed to do must be bad for russia and we want to care -- counteract thatver they want to do, to an adversarial spirit
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that i think existed during the cold war, has made the relationship more difficult. was hammered home when russia went into crimea and portions of ukraine. the reason we impose to nottions, recall, was because of nuclear weapons issues. it was because independence and sovereignty of a country, ukraine, had been encroached upon. by force. by russia. that was not our judgment. it was the judgment of the entire international community. russia continues to occupy ukrainian territory and metal in ukrainian affairs and support military surrogates who have violated basic interactional law
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-- international law and norms. it would probably best serve not only american interest, but also the interests of preserving made sureorms, if we we do not confuse why the sanctions were imposed with a whole other set of issues. issues, we negotiated the treaty and that has substantially reduced our nuclear stock files. i was prepared to go further and i told president putin. they have been unwilling to negotiate. if president-elect trump is able to restart the talks in a serious way, there remains a lot for our two countries to
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reduce stockpiles. part of the reason we have been successful on our nonpolar -- proliferation agenda is because we were leading by example. i hope it continues. important to remember the reason sanctions have been put in place against russia has to do with their actions against the ukraine. it is important for the united for the basicd up principle that big companies do not go around and invade/-- invade and bully smaller companies. i expect russia and the ukraine to have a strong relationship. they are historically bound all sorts of cultural and social ways but ukraine is an independent country. example of a vital role america has to continue to play around the world preserving basic norms and values, whether
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it is advocating on behalf of human rights, women's rights, freedom of the press, you know, alwaysted states has not been perfect in this regard. there are times where by necessity we are dealing with allies or friends were partners who themselves are not meeting the standards we would like to see metz when it comes to international rules and norms. in every tell you multilateral setting in the united nations, the g-20, the g7, typically the united states has been on the right side of these issues. it is important for us to continue to be. if we, the largest and strongest country and democracy in the are not willing to stand
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up on behalf of these values, certainly china and russia and others will not. kevin. >> thank you. you have been a strong supporter of the idea of a peaceful demonstratedower, not far from the rose garden. there are morek, than five dozen democrats who will or copy an operation of the incoming president. do you support that and what message when you send to democrats to better demonstrate a peaceful transfer of power. and i wanted to ask you about your conversation with the president-elect previously and without getting into the personal side of it too much, were you able to use the opportunity to convince him to take a fresh look at important ideas you will leave his office with? maintaining the affordable care
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act, some idea of keeping dreamers here in the country, were you able to use personal stories to convince him and how successful were you? president obama: i will not going to details about my conversations with president-elect trump. they have been cordial and at times, fairly lengthy and substantive. convincingll you how i have been. you would have to ask him whether or not i have been convincing. i have offered my best advice about certain issues foreign and domestic. assumption is that having won an election opposed to a number of my initiatives,
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and certain aspects of my vision for where the country needs to to it is appropriate for him go forward with his vision and his values. i do not expect that there will overlap.rmous it may be that on certain issues, once you come into the office and he looks at the complexities of how to provide health care for everybody, , hething he wants to do lost to make sure he is encouraging job creation. that may lead him to some of the same conclusions once i got here. i do not think we'll know until he has the actual chance to get sworn in and sit behind the desk. i think a lot of his views will
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be shaped by his advisors, the people around him. it is important to pay attention to these confirmation hearings. , and this isu something i have told him, that this is a job of such magnitude that you cannot do it by yourself. on are enormously reliant your cabinet, your senior white all the way to fairly junior folks in the 20's and 30's, but they have responsibilities. how you put a team together to make sure they're giving you the best information and teaming up -- teeing up the options from which you will ultimately make that is probably the most useful and construction --
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constructive advice i've been able to give him. if you find yourself isolated breakdown orrocess you are only hearing from people who agree with you on everything, or you have a process that is fact checking and probing and asking hard questions about policies or promises you have made, that is when youquestions about start m. as i indicated, reality has a way of fighting back if you are not paying attention to it. with respect to the inauguration, i will not, and all i know is that i will be there and so will michelle. have checked the weather and i am heartened by the fact it will not be as cold as when i was. i was cold. rodriguez. >> you said a couple of weeks
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ago -- are you fearful for the status immigrants and all immigrants in this administration and what did you mean when you said you would come back? a second question, why would you take action -- obama: let me be clear, i did not mean i would be running for anything anytime soon. what i meant is it is important to me to take some time process this amazing experience to make sure my wife, with whom i will be celebrating a 25th anniversary this year, will put up with me for a little bit longer, i want to do some writing.
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a little to be quite bit and not hear myself talk so darn much. i want to spend precious time with my girls. those are my priorities this year. important for is democrats for progressives who that they came out on the wrong side of the selection to be able to distinguish between the normal back-and-forth evan flow of policy. are we going to raise taxes or lower taxes? are we going to expand this program or eliminate the program? we about air are pollution or climate change?
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those are all normal price of the debate. as i said before, and democracy you will sometimes win and sometimes lose. i am confident about the on somes of my position of these points. we have a new president and congress who will make those determinations are there will be a back-and-forth on that. there is a difference between the normal functioning of and certain issues or thinkn moments where i our core values may be at stake. i would put in that category, if i saw systematic discrimination being ratified in some fashion, explicitthat category,
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or functional obstacles to people being able to vote, to exercise their franchise, i put institutionalry efforts to silence dissent or for me at least, i would put in the category round up kids who have grown up here and for all practical purposes are american kids, and send them someplace else. country, love this they are our kids friends and classmates. entering -- entering into community colleges and this
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-- serving in the military. the notion that we would because of or punish thoseitics, kids, when they did not do anything wrong themselves, i think it would be something that would merit me speaking out. it does not mean that i would get on the ballot. with respect to wet foot dry we underwent a monumental shift in the policy toward cuba. my view was after 50 years, it made sense to try and reopened to engage aelations cuban government and the honest with them about strong agreement -- disagree -- strong agreements we had around political
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ofression and treatment dissenters and print -- freedom of press and freedom of religion, but to make that progress for the cuban people. the best shot was to suddenly have cuban people interacting with americans. success ofincredible the cuban american people and engaging in commerce and trade. it was through that process of opening up these bilateral relations that you would see over time, serious and significant improvement. given that shift in the the policy had in treated cubans
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folkstely different from from el salvador or guatemala, or nicaragua or any other part of the world, one that made a distinction between whether you got here by land or by foot, that was a carryover of an old way of thinking that did not in this day and age, particularly as we open up travel between those two countries. so we had lengthy conversations with the department of homeland security. tough negotiations with the cuban government. we arrived at a policy we think toboth fair and appropriate the changing nature of the relationship between the two countries.
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>> i appreciate the opportunity and want to wish you and your family a bright future. mr. trump -- the embassies, ambassador who does not believe the two to -- two state solution. will this even protect israel? they should hold israel more accountable? thank you. obama: i continue to be significantly worried and i am worried about it both because ishink the status quo
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unsustainable, that it is that it isor israel, bad for palestinians, bad for the region, and bad for america's national security. office wantings to do everything i could to serious peace talks between israelis and palestinians. we invested a lot of energy and .ime and effort the first year, second year, all the way until last year. ultimately, what has always been clear is we cannot force the parties to arrive in peace. facilitate andis , encourage,atform but we cannot force them to do it.
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in light of shifts in israeli politics and palestinian drift in a right word ofaeli politics, weakening the ability to move and take risks on behalf of peace into palestinian territories, in light of all the dangers that emerged in the region, and the understandable fears they had about the chaos and rise of groups like isil, the deterioration of syria, in light what wef those things, at least wanted to do, understanding those two parties would not actually arrive at a final agreement, is to preserve the possibility of a two state solution because we do not see an alternative to it.
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i've said this directly to prime minister netanyahu at inside of israel. i've set it to palestinians as well. i do not see how this issue gets maintainsn a way that israel as both jim risch and a democracy. jewish and a democracy. you are standing occupation, wontional you have state in which millions of people are disenfranchised and operate as a second-class. resident spirit you cannot even call them citizens, necessarily. goal of the resolution was to simply say that the settlement, the growth of the settlements, are creating a
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reality on the ground that it increasingly will make a two state solution impossible. we believed, consists -- consistent with the position taken by previous u.s. administrations for decades now, that it was important for us to send a signal, a wake-up call, that this moment may be passing israeli voters and palestinians need to understand this moment may be passing. that hopefully creates a debate inside both israeli and thattinian communities will not immediately result in peace but at least will lead to a more sober assessment of what the alternatives are. president-elect will have his own policy.
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for theidate ambassadorship has different views than i do. that is their prerogative. that is part of foot happens after elections. just part of what happens after elections. we will see how their approach plays itself out. i do not want to project today what could end up happening but it is a volatile environment, what we have seen in the past is when sudden unilateral moves are made, that speak to some core issues and sensitivities of that can be explosive. what we tried to do in the thesition is just provide context in which the president-elect may want to make some of these decisions.
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that is part of what we have tried to indicate to the incoming team in our transition process, to pay attention to this. because this is volatile stuff. people feel deeply and passionately about this. as i have said i think many the actions that we take have you consequences and ramifications. we are the biggest kid on the block. i think it is right and appropriate for a new president to test old assumptions and re-examine the old ways of doing things. it if you are going to make shifts in policies, just make
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sure you have thought it through and understand there will be consequences and actions, reactions, sote you want to be intentional about it and not do things off-the-cuff when it comes to an issue this follicle. >> we will cut away for just a few moments here are you can watch the rest on bloomberg at life go. we are online at our live event channel. janet yellen about to begin speaking in san francisco. investors will listen carefully to hear what she has to say about the prospect of future rate increases. i am scarlet fu. i am oliver renick. michael mckee is here with us to break it down. tell us what we're looking at. text least during the portion of her speak, she will take question that might rake some news.
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she basically repeats what the fed has said in its statements. nothing in it is market moving. says it is fair to say the economy is near maximum employment and inflation is moving toward our goal. she goes onto zac cannot tell you what -- when the fed will raise rate next because it depends on how the economy over the coming months. she is not giving guidance on anything. she says it makes sense to continue to reduce the level of accommodation because the economy is getting stronger but the pace and speed and timing, that will the pen on the economy. here aboutthing in fiscal policy and donald trump, the idea that they do not know what will happen, they cannot make predictions about changing monetary policy. there is an interesting line where she knows the fed is independent and always had been. nonpartisan and focus squarely
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on public interest. donald trump suggested the fed was acting on behalf of hillary clinton and in this case, she pushes back against that. not adjustingsly it head on. i also noticed monetary policy cannot by itself create healthy economy, not directly addressing any of trump's plans but hinting to or the benefit of fiscal policy. >> they cannot raise out activity. that is something for fiscal policy to a dress. scarlet: thank you for giving us the breakdown on janet yellen's's remarks when she gives her speech. we will bring that to you on the bloomberg at life go. we will bring you the q&a portion life. let's return to washington where president obama is holding his final news conference of his
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president. president obama: to have defense secretary bob gates, and chairman mike mullen and joint open tojoint chiefs and worked with me to i'm proud ofthing, that. but none of that would have happened without this incredible transformation that was happening in society. i gave l in the presidential medal of freedom, i'm in what i said. -- i meant what i said. i think somebody that kind and projecting into living , you around the country know, that changed attitudes.
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it was not easy to do for her. of whate small example was happening in countless communities across the country. that in certain places, we may be provided a to help theownfield movement advance. i do not think it is something that will be reversible. hasuse american society changed the attitudes of young people in particular have changed. it does not mean there are not going to be some fights that are important. legal issues. transgenderunding persons. there will still be some battles to take lace. to young people,
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melia and sasha's generation, are if republicans, if they conservative, many of them will tell you i do not understand how you would discriminate against somebody because of sexual orientation. that is burned into them in powerful ways. april. >> thank you. on before today, -- under your watch, people have said that you withexpanded inclusion and the election and the incoming administration, people are saying is maybe even broken. a timeinking back to when air force one went to selma, alabama, when you said .our job was to close the gaps
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what gaps still remain and also, what part do you play in fixing those gaps? and lastly, you are the first black president. do you expect the country -- president obama: i will answer the last question first. i think we will see people of every race,p from fate, corner of this country. because that is america'strength. when we have everybody getting a chance at everybody is on the field, we end up being better. i think i have used this analogy before. olympics in in the brazil. michelle and i always have our olympic team here. it is a lot of fun first of all
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because you know, anytime your meeting somebody who is the best at anything, it is impressive. these mostly very young people are all just so healthy looking. fitnesst beam and exude and health. so we have a great time talking to them. but they are of all shapes, sizes, colors. diversitythe genetic that is on display is remarkable. simone, and then theyook at michael phelps, are completely different. it is precisely because of those that we have got people here who can excel at any sport. and, by the way, more than half of our metals came from women and the reason is because we had
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the foresight, several decades ago, with something called title ix, to make sure women got opportunities in sports. compete why our women that her. because they have more opportunities than folks in other countries. i use that as a metaphor. to keepct we continue opportunity open to everybody, then we will have a woman president, a latino president, situation president, a hindu president. who knows where we're going. i suspect we will have a whole bunch of mixed the president's at some point that nobody really knows what to call them. [laughter] president obama: and that is fine. about? i worry i spent a lot of time on this, april, at my farewell address on
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tuesday. i will not go through the whole list and i worry about inequality because i think if we in making sureng everybody plays a role in this economy, the economy will not grow as fast and i think it will also lead to further and further separation between us as americans. not just along racial lines. of folks voted for the president-elect because they feel forgotten and disenfranchised. they feel as if they are being looked down on, they feel as if their kids will not have the same opportunities as they did. you don't want to have an -- and americaan in which a small sliver of people are doing really well and everybody else is fighting for scraps, as i said last week. racial often when
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divisions get magnified because people think, well, the only way i will get anything is if i make less,omeone else gets someone who does not look like me or worship the same place i do. that is not a good recipe for our democracy. , as i said in response to a previous question, making sure that the basic machinery of our democracy works better. we are the only country in the advanced world that makes it harder to vote rather than easier. that is an ugly history to that we should not be shy about talking about. i am talking about voting rights. reason we are always been country traces directly back to jim crow.
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and the legacy of slavery. restrict acceptable to the franchise. not who we are. it should not be who we are. that is not what america works best. i hope people pay a lot of attention to making sure everybody has the chance to vote. make it easier and harder. the whole notion of voting fraud , this has constantly been disproved. this is fake news, the notion that there a -- there are a whole bunch of people not eligible to vote who want to vote. opposite problem we have a whole bunch of people eligible to vote who do not vote. the idea that we put in place a whole bunch of barriers to people voting does not make sense. and as i said before, political gerrymandering that makes your vote matter less because
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politicians have decided you live in a district where everybody votes the same way you do, so that these are not competitive races, and we get 90% democrat districts and 90% republican districts, that is bad for our democracy and i worry about that. is very important for us to make sure our criminal .ustice system is fair and just i also think it is important to politicized,is not that it maintains and integrity that is outside of partisan politics at every level. at some point, we're going to we have tond an re-examine just the flood of endless money that goes into our politics, which i think is unhealthy.
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there are a bunch of things i worry about there. as i said in my speech tuesday, we have got more work to do on race. it is simply not true that things have gotten worse. they have not. things are getting better. have more confidence on racial issues in the next generation than i do in our generation or the previous generation. kids are smarter about it, they are more tolerant, they are more inclusive i instinct than -- and by instinct than we are. know, when we feel stress when we are just
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fed information that encourages some of our worst in states, we tend to fall back into some of racial fears and racial divisions and racial stereotypes. it is very hard for us to break out of those and think about people as people. and imagine being in that person'shoes. either way, it is no longer a black and white issue alone. we have got hispanic folks and asian folks. the same oldust battles. we have got this stew bubbling up of people from everywhere. we are going to have to make sure that in our own lives and own families and workplaces, do job of treating
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andybody with basic respect understanding that not everybody starts off in the same situation, and imagining what it would be like if you were born in an inner-city, and had no job prospects anywhere within a 20 mile radius. or, how does it feel being born in a rural county where there are no job opportunities in a 20 mile radius? seeing those two things as connected as opposed to separate. so, we have got work to do. front,, i think on this the trendlines ultimately i think will be good. christie, you are going to get the last question.
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i have known her since springfield, illinois. when i was a state senator, she listened to what i had to say. the least i can do is give her the last question as president of the united states. go ahead. there you go. go ahead. you, mr. president. it has been an honor. i have a personal question because i know how much you like those. lady put the steaks of the 2016 alexion in personal terms in a speech that resonated , and shee country really spoke to concerns of a lot of women and lgbt folks, people of color and many others. i wonder now how you and the thet lady will talk about first -- the meaning of this election and how you interpret it for yourself and them.
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you know, every parent brags on their daughters, or their sons. mom and dad don't brag on you, you have got problems. my daughters or something. areur -- my daughters something. and surprise and enchant impress me more and more every single day as they grow up. these days, when we talk, we talk as parent to child but we also learn from them. it was really interesting to see how melia and saw shary acted.
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they were disappointed. they paid attention to what their mom said during the campaign and believed it because it is consistent with what we have tried to teach them in our household and how i try to model what we have asked from futurect boyfriends or spouses, we have also tried to teach them resilience. we have tried to teach them hope. and that the only thing that is the end of the world is the end of the world. so you get knocked down, you get up and brush yourself off, and you get back to work. that tended to be their attitude. think neither of them intended
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to pursue a future of politics and i think their mother in float -- their mothers influence shows in that. have grown upem in an environment where i think they could not help that be patriotic, to love this country deeply, to see that it is flawed, but see that they have responsibilities to fix it. and that they need to be active citizens, and they have to be in a position to talk to their friends and their teachers and their future coworkers in a way to shed some light as opposed to just generate a lot of fury and sound. i expect that is what they are going to do.
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they do not mope. --t i'm really proud of them what makes me proudest about them is they also do not get cynical about it. they do not assume because their , or because win some of the values they care about do not seem as if they are vindicated, that automatically, america has somehow rejected them or their values. i do not think they feel that way. think in part through osmosis in part through dinnertime conversations appreciate the fact that this is a big complicated country and democracy is messy and it does not always work exactly the way
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you might want. does not guarantee certain outcomes. involved, engaged and there are a lot more good people than bad in this country. there is a core decency to this country. they have got to be a part of lifting that up to i expect they will be. in that sense, they are representative of this generation that makes me really optimistic. i have been asked, i have had some conversations with some journalists swear they said, ok, you seem like you are ok, but really, what are you thinking? no, what i'm saying really is what i think that i believe in this country. i believe in the american people. believe people are more good than bad.
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i believe tragic things happen. i think there is evil in the world, but i think at the end of the day, if we work hard, and if we are true to those things in us that feel true and right, the world gets a little better each time. that is what this presidency has tried to be about and i see that in the young people i have worked with. i could not be prouder of them. this is not just a matter of no drama obama. this is what i really believe. it is true that behind closed doors, i curse more than i do and sometimes i get mad and frustrated like everybody else does. but at my core, i think we're going to have -- we are going to be ok. we just have to fight for it and work for it. thank you and good luck.
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scarlet: president obama holding his final news conference of his presidency. andalked about his family his daughter's reaction to the election, conversation with mr. trump, to his commuting of chelsea manning'sentencing. fed chair janet yellen is .peaking janet yellen said close to inflation and employment. she cannot give a timing, but she says she and most of her colleagues expect a few rate hikes per year. the federal reserve policymakers expect three interest rate increases for 2017. oliver: she kind of reinforced that where she pointed out the petal is still to the metal in spur of attempts to
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inflation, attempts to spur growth. i thought it was interesting that she also addressed the .itfalls of monetary policy it does not bring you all the way to a healthy economy. that will be an important issue to figure out what tools they will pull out of the toolbox to figure out in that case. yellen given her speech, let's listen in. the first step came a year earlier. and it reflects our confidence the economy will continue to improve. many of you would love to know exactly when the next rate increase is coming. [laughter] yellen: the simple truth is i cannot tell you because it will depend on how the economy actually evolves over the coming months. the economy is fast and vastly
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complex. its path can take surprising twists and turns. what i can tell you is what we expect. that with a large caveat our interest-rate expectations will change as our outlook for the economy changes. of last month, i and most of my colleagues, the other members of the fed board in washington, and the presidents of the 12 regional federal reserve banks, expecting to increase our federal funds rate target a few until, by the end of 2019, it is close to our estimate of its longer run neutral rate of 3%. rate requiresal explaining. rate that, once the economy has reached our objectives, will keep the
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economy on an even keel. pressing on the gas pedal to make the cargo faster, nor easing off so much that the car slows down. foot is still pressing on the gas pedal right now. we have eased back a bit. our foot remains on the petal in makebecause we want to sure the economic expansion remains strong enough to withstand an unexpected shock given that we do not have much room to cut interest rates. inflation is still running below the 2% objective and by some measures, there may still be some room for progress in the job market. only recentlys begun to pick up and remain fairly low. a broader measure of unemployment is not quite back to prerecession levels. it includes people who would
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like a job but have been too andouraged to look for one people who are working part time but would rather work full-time. approaches our objectives, it makes sense to gradually reduce the level of monitor policy support. takees in monetary policy time to work their way into the economy. waiting to long to begin moving toward the neutral rate could risk a nasty surprise down the road. either too much inflation, financial instability, or both. we could be forced to raise whichst rates rapidly, could push the economy into a new recession. the factors i have just discussed are the usual sort that central bankers consider as economies move toward a
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recovery. , longer-term trend productivity growth, helps explain why we do not think dramatic interest-rate increase -- increases are required to move the fund rate target back to neutral. productivity, the output of goods and services per hour of work, has increased by only a year on average over the past six years or so. only one and a quarter percent over the past decade. that contrasts with the previous 30 years, when productivity grew a bit more than 2% per year. this productivity slowdown matters enormously because american standard of living depends on productivity growth. with productivity growth of 2% per year, the average standard
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of living will double roughly every 35 years. that means our children can reasonably hope to be better off economically than we are now. productivity growth of 1% per year means the average standard of living will dub her -- double only every 70 years. economy do not fully understand the causes of the productivity slowdown. some emphasize technological process just progress and its diffusion throughout the economy seems to be slower over the past decade or so. look at college graduation rates, which have flattened out after rising rapidly in previous generations. still others focus on the dramatic slowing and creation of new businesses, often more innovative than established firms. factors has likely
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played a role in slowing productivity growth, the extent to which they will continue to do so is an open question. does slow productivity growth if it persists in part a lower neutral interest rate? first, it implies the economy's usual weight -- rate of output growth when appointment is at its maximum, will be significantly slower than the purse -- post-world war ii -- average. slower economic growth implies businesses will see less need to expansion paired it implies families and individuals who feel the need to save more and then less because interest rates are the mechanism that bring supply savings and funds into balance. more saving and less investment

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